Committee advances bill letting Santa Cruz County ask voters to raise local tax cap amid debate over local taxing power

Senators sent SB 1078 to the Committee on Revenue and Taxation after a debate that centered on whether the measure merely authorizes a local voter decision or effectively authorizes additional local taxing power.

"I am Nicole Coburn, the County Executive Officer of the County of Santa Cruz," Coburn said in support. She asked senators to back SB 1078 so the county "can approve placing a measure before the voters this November to increase our sales tax and use rate by a half a percent." Coburn told the committee Santa Cruz is seeking the authority because federal reductions (cited as H.R.1 impacts) have left roughly $25 million in local funding gaps and noted about 83,000 people in the county are enrolled in Medi-Cal ("that's 30% of our population").

Supporters said the bill simply authorizes a local vote, not an automatic tax increase, and described the measure as a tool for counties to ask voters to backfill cuts to health and safety-net services. Senator Arregin and others suggested coordinating the measure with parallel Assembly discussions about a larger package of authorities.

Opponents and concerns: Senator Choi pushed back on sponsor language that the bill is "not a tax," arguing the bill authorizes counties to raise the tax cap from 2% to 2.5% and that case-by-case approvals across many counties could create inequities. "This is a word game," Choi said, calling it effectively "another tax" and saying the committee should consider fairness if many counties seek the same authority.

Action and next steps: The committee recorded a roll-call vote reported as 5–2 and referred SB 1078 to the Senate Committee on Revenue and Taxation for further consideration.